THE STATE CORPORATION COMMISSION OF THE STATE OF KANSAS. Shari Feist Albrecht Jay Scott Emler

Transcription

1 Kansas Corporation Commission THE STATE CORPORATION COMMISSION OF THE STATE OF KANSAS Before Commissioners: Pat Apple, Chairman Shari Feist Albrecht Jay Scott Emler In the Matter of the Joint Application of Great Plains Energy Incorporated, Kansas City Power & Light Company and Westar Energy, Inc. for Approval of the Acquisition of Westar Energy, Inc. by Great Plains Energy Incorporated. Docket No. ORDER DENYING JOINT APPLICANTS' PETITION FOR RECONSIDERATION This matter comes before the State Corporation Commission of the State of Kansas (Commission for consideration and decision. Having reviewed the pleadings and record, the Commission makes the following findings: I. On May 31, 2016, Great Plains Energy 1 (Great Plains or GPE announced it had reached a definitive agreement to acquire 100% of the stock of Westar Energy, Inc. and Kansas Gas and Electric Company (Westar in a transaction then valued at approximately $12.2 billion, including assumed debt.2 On June 28, 2016, GPE, KCP&L and Westar filed their Joint Application seeking approval for GPE's acquisition of Westar. 2. On April 19, 2017, the Commission issued an Order denying the proposed transaction. 3 The Commission explained, "[a]fter a thorough examination of its merger standards, the Commission concludes the proposed transaction is not in the public interest. The proposed transaction fails not only to meet the majority of the merger standards, but it fails to meet the most important of the factors." Specifically, the Commission reasoned the proposed 1 Great Plains Energy is the parent company of Kansas City Power & Light Company (KCP&L. See Joint Application, June 28, Id,~ 6. 3 Order, Apr. 19, 2017, ~ 89.

2 transaction was too risky because the excessive acquisition premium calls into question GPE's ability to service the transaction-incurred debt, leaving GPE little margin for error to maintain its investment grade rating. 4 The Joint Application did not give the Commission adequate assurances that GPE would be able to service the newly-incurred debt without raising rates or reducing services On May 4, 2017, the Joint Applicants filed their Petition for Reconsideration seeking to "set the matter for further proceedings so that the Joint Applicants may work together to determine whether it is feasible to develop a revised Transaction proposal." 6 4. On May 9, 2017, Staff filed its Response to Joint Applicants' Petition for Reconsideration, advising the Petition should be denied because it contains no allegation of error. 7 Staff views the Petition for Reconsideration as a motion for an extension of time, which requires a showing of good cause On May 11, 2017, the Citizens' Utility Ratepayers Board (CURB filed its Response to Joint Applicants' Petition for Reconsideration, expressing its belief that any revision to the rejected Joint Application would be so substantial as to be tantamount to a new application, and best handled in a new docket. 9 CURB questions why the Joint Applicants' prayer for relief constitutes a petition for reconsideration as the Joint Applicants "have no problem with allowing the Commission's April 19, 2017 Order to stand." The Commission reiterates its belief that the Joint Applicants are responsible companies that serve their communities well as evidenced by the outpouring of support from 4 Id.,~ Id.,~ Joint Applicants' Petition for Reconsideration, May 4, 2017, ~ 9. 7 Staffs Response to Joint Applicants' Petition for Reconsideration, May 9, 2017, ~ 4. 8 Id.,~ 8. 9 CURB's Response to Joint Applicants' Petition for Reconsideration, May 11, 2017, ~ Id.,~ 7. 2

3 community leaders and elected officials. However, to promote the public interest, a proposed transaction must satisfy the merger standards. As the Joint Applicants acknowledge in their Petition for Reconsideration, they would have to substantially change their application and supply a wealth of new evidence to satisfy the merger standards. 7. K.S.A (a(l requires a petition for reconsideration to state "the specific grounds upon which relief is requested." 11 Here, the Joint Applicants offer no grounds for relief as the only relief sought is additional time. A petition for reconsideration must allege specific grounds for the order's unlawfulness or unreasonableness. 12 The Joint Applicants' Petition for Reconsideration fails to allege any specific defects with the Order or that the Order was in any way unlawful or unreasonable. Instead, by its own admission, the Joint Applicants' pleading merely seeks additional time to determine if it is possible to develop a new proposed transaction. 8. Since the Joint Applicants' Petition for Reconsideration does not meet the legal requirements for a petition for reconsideration, the Docket closed by operation of law fifteen days after the Commission issued its Order. 13 Under Kansas law, the only option available to the Commission is denial. 9. The Commission encourages the parties to continue working together to "revise the Transaction to address the Commission's concerns related to purchase price, capital structure and other issues" 14 and welcomes the filing of a new application that can satisfy the merger standards and advance the public interest. 11 K.S.A (a(l. 12 Peoples Natural Gas Div. of Nothern Natural Gas v. Kansas Corp. Comm 'n, 7 Kan. App. 2d 519, 526, rev. denied 231 Kan. 801 (1982; see also Southwestern Bell Tel. Co. v. Kansas Corp. Comm 'n, 29 Kan. App. 2d 414, 425 ( See K.S.A (a(l. 14 Joint Applicants' Petition for Reconsideration, if 3. 3

4 THEREFORE, THE COMMISSION ORDERS: A. The Joint Applicants' Petition for Reconsideration is denied. B. This Order constitutes final agency action. 15 Any request for review of this action shall be in accordance with K.S.A and K.S.A Lynn M. Retz, Secretary to the Commission, is designated by the Commission to receive service of a petition for judicial review. 16 C. The Commission retains jurisdiction over the subject matter and parties for the purpose of entering such further orders as it deems necessary. BY THE COMMISSION IT IS SO ORDERED. Apple, Chairman; Albrecht, Commissioner; Emler, Commissioner Dated: HAY BGF Secretary to the Commission ED MAY K.S.A (b(l. 16 K.S.A (e. 4

5 I, the undersigned, certify that the true copy of the attached Order has been served to the following parties by means of Electronic Service on HA_Y_2_3_2_0_17 W. ROBERT ALDERSON, JR., ATTORNEY ALDERSON ALDERSON WEILER CONKLIN BURGHART & CROW LLC 2101SW21ST STREET (66604 Fax: MICHAELE. AMASH, ATTORNEY BLAKE & UHLIG PA SUITE 475 NEW BROTHERHOOD BLDG 753 STATE AVE. KANSAS CITY, KS Fax: KURTJ.BOEHM,ATTORNEY BOEHM, KURTZ & LOWRY 36 E SEVENTH ST STE 1510 CINCINNATI, OH Fax: kboehm@bkllawfirm.com JODY KYLER COHN, ATTORNEY BOEHM, KURTZ & LOWRY 36 E SEVENTH ST STE 1510 CINCINNATI, OH Fax: jkylercohn@bkllawfirm.com MARTIN J. BREGMAN BREGMAN LAW OFFICE, L.L.C. 311 PARKER CIRCLE LAWRENCE, KS mjb@mjbregmanlaw.com ANDREW J ZELLERS, GEN COUNSELNP REGULATORY AFFAIRS BRIGHTERGY, LLC 1712 MAIN ST 6TH FLR KANSAS CITY, MO Fax: andy.zellers@brightergy.com GLENDA CAFER, ATTORNEY CAFERPEMBERTONLLC 3321 SW 6TH ST TOPEKA, KS Fax: glenda@caferlaw.com TERRI PEMBERTON, ATTORNEY CAFER PEMBERTON LLC 3321 SW 6TH ST TOPEKA, KS Fax: terri@caferlaw.com THOMAS J. CONNORS, ATTORNEY AT LAW CITIZENS' UTILITY RATEPAYER BOARD Fax: tj.connors@curb.kansas.gov TODD E. LOVE, ATTORNEY CITIZENS' UTILITY RATEPAYER BOARD Fax: t. love@curb.kansas.gov

6 DAVID W. NICKEL, CONSUMER COUNSEL CITIZENS' UTILITY RATEPAYER BOARD Fax: d. DELLA SMITH CITIZENS' UTILITY RATEPAYER BOARD Fax: SHONDA SMITH CITIZENS' UTILITY RATEPAYER BOARD Fax: DANIEL R. ZMIJEWSKI DRZ LAW FIRM 9229 WARD PARKWAY STE 370 KANSAS CITY, MO Fax: ASHLEY M. BOND, ATIORNEY DUNCAN & ALLEN 1730 RHODE ISLAND AVENUE NW SUITE 700 WASHINGTON, DC Fax: KEN HOLMBOE, ATIORNEY AT LAW DUNCAN & ALLEN 1730 RHODE ISLAND AVENUE NW SUITE 700 WASHINGTON, DC Fax: GREGG D. OTIINGER, ATIORNEY DUNCAN & ALLEN 1730 RHODE ISLAND AVENUE NW SUITE 700 WASHINGTON, DC Fax: SHANNON FISK, ATIORNEY EARTHJUSTICE 1617 JOHN F KENNEDY BLVD SUITE 1675 PHILADELPHIA, PA sfisk@earthjustice.org KEVIN HIGGINS ENERGY STRATEGIES, LLC PARKSIDE TOWERS 215 S STATE ST STE 200 SALT LAKE CITY, UT Fax: kh igg ins@energystrat.com WILLIAM R. LAWRENCE FAGAN EMERT & DAVIS LLC 730 NEW HAMPSHIRE SUITE 210 LAWRENCE, KS Fax: wlawrence@fed-firm.com ALI NELSON, PARALEGAL FAGAN EMERT & DAVIS LLC 730 NEW HAMPSHIRE SUITE 210 LAWRENCE, KS Fax: anelson@fed-firm.com SARAH STEELE GILMORE & BELL, P.C. ONE MAIN PLACE 100 NORTH MAIN, STE. 800 WICHITA, KS ssteele@gilmorebell.com

7 DOUGLAS L. HEALY, ATTORNEY AT LAW HEALY LAW OFFICES, LLC 3010 E BATTLEFIELD STE A SPRINGFIELD, MO doug@healylawoffices.com TERRY M. JARRETT, ATTORNEY AT LAW HEALY LAW OFFICES, LLC 514 East High Street Suite 22 Jefferson City, MO terry@healylawoffices.com DARRELL MCCUBBINS, BUSINESS MANAGER IBEW LOCAL UNION NO PO BOX KANSAS CITY, MO Fax: kwhiteman@ibew1464.org DUANE NORDICK, BUSINESS MANAGER IBEW LOCAL UNION NO N BROADWAY WICHITA, KS d uane _ nordick@sbcg lobal. net DAVID PINON, BUSINESS MANAGER IBEW LOCAL UNION NO EXECUTIVE DR SUITE 180 KANSAS CITY, MO local 1613@earthlink.net RAYMOND ROGERS, BUSINESS MANAGER IBEW LOCAL UNION NO. 225 PO BOX404 BURLINGTON, KS rcrogers@cableone.net JOHN GARRETSON, BUSINESS MANAGER IBEW LOCAL UNION NO NW 16TH STREET TOPEKA, KS Fax: johng@ibew304.org BILL MCDANIEL, BUSINESS MANAGER IBEW LOCAL UNION NO CONNECTICUT SUITE 105 KANSAS CITY, MO Fax: business.manager@me.com JOHN KRAJEWSKI, PRESIDENT J K ENERGY CONSUL TING LLC 650 J STREET STE 108 LINCOLN, NE Fax: jk@jkenergyconsulting.com ALAN I. ROBBINS, ATTORNEY JENNINGS, STROUSS & SALMON, P.L.C 1350 I Street, NW Suite 810 WASHINGTON, DC Fax: arobbins@jsslaw.com DEBRA D. ROBY, ATTORNEY JENNINGS, STROUSS & SALMON, P.L.C 1350 I Street, NW Suite 810 WASHINGTON, DC Fax: droby@jsslaw.com JOHN R. WINE, JR. 410 NE 43RD TOPEKA, KS Fax: jwine2@cox.net

8 SUSAN ALIG, ASSISTANT COUNSEL KANSAS CITY KANSAS BOARD OF PUBLIC UTILITIES 701 N 7TH STREET KANSAS CITY, KS Fax: salig@wycokck.org ANDREW FERRIS, DIRECTOR OF ELECTRIC SUPPLY PLANNING KANSAS CITY KANSAS BOARD OF PUBLIC UTILITIES 312 N 65TH STREET KANSAS CITY, KS aferris@bpu.com ANGELA LAWSON, SENIOR COUNSEL KANSAS CITY KANSAS BOARD OF PUBLIC UTILITIES 540 MINNESOTA AVENUE KANSAS CITY, KS alawson@bpu.com ROBERT J. HACK, LEAD REGULATORY COUNSEL ONE KANSAS CITY PL, 1200 MAIN ST 19th FLOOR (64105 Fax: rob. hack@kcpl.com DARRIN R. IVES, VICE PRESIDENT, REGULATORY AFFAIRS ONE KANSAS CITY PL, 1200 MAIN ST 19th FLOOR (64105 Fax: O darrin.ives@kcpl.com MARY TURNER, DIRECTOR, REGULATORY AFFAIR ONE KANSAS CITY PL, 1200 MAIN ST 19th FLOOR (64105 Fax: mary.turner@kcpl.com ROGER W. STEINER, CORPORATE COUNSEL ONE KANSAS CITY PL, 1200 MAIN ST 19th FLOOR (64105 Fax: roger.steiner@kcpl.com NICOLE A. WEHRY, SENIOR PARALEGAL ONE KANSAS CITY PL, 1200 MAIN ST 19th FLOOR (64105 Fax: nicole.wehry@kcpl.com ANTHONY WESTENKIRCHNER, SENIOR PARALEGAL ONE KANSAS CITY PL, 1200 MAIN ST 19th FLOOR (64105 Fax: anthony.westenkirchner@kcpl.com BRIAN G. FEDOTIN, DEPUTY GENERAL COUNSEL KANSAS CORPORATION COMMISSION Fax: b.fedotin@kcc.ks.gov ANDREW FRENCH, SENIOR LITIGATION COUNSEL KANSAS CORPORATION COMMISSION Fax: a.french@kcc.ks.gov DUSTIN KIRK, DEPUTY GENERAL COUNSEL KANSAS CORPORATION COMMISSION Fax: d.kirk@kcc.ks.gov

9 MICHAEL NEELEY, LITIGATION COUNSEL KANSAS CORPORATION COMMISSION Fax: m. ks. gov AMBER SMITH, CHIEF LITIGATION COUNSEL KANSAS CORPORATION COMMISSION Fax: MARK DOLJAC, DIR RATES AND REGULATION KANSAS ELECTRIC POWER CO-OP, INC. 600 SW CORPORATE VIEW (66615 PO BOX Fax: WILLIAM G. RIGGINS, GENERAL COUNSEL KANSAS ELECTRIC POWER CO-OP, INC. 600 SW CORPORATE VIEW (66615 PO BOX Fax: CATHRYN J DINGES, CORPORATE COUNSEL KANSAS GAS & ELECTRIC CO. D/B/A WESTAR ENERGY 818 S KANSAS AVE PO BOX889 TOPEKA, KS Fax: cathy.dinges@westarenergy.com LARRY HOLLOWAY, ASST GEN MGR OPERATIONS KANSAS POWER POOL 100N BROADWAY STE L110 WICHITA, KS Fax: lholloway@kansaspowerpool.org JEFFREY L. MARTIN, VICE PRESIDENT, REGULATORY AFFAIRS KANSAS GAS & ELECTRIC CO. D/B/A WESTAR ENERGY 818 S KANSAS AVE PO BOX889 TOPEKA, KS jeff.martin@westarenergy.com CURTIS M. IRBY, GENERAL COUNSEL KANSAS POWER POOL LAW OFFICES OF CURTIS M. IRBY 200 EAST FIRST ST, STE. 415 WICHITA, KS Fax: cmfrby@sbcg lobal. net JOHN MICHAEL ADRAGNA ESQ. MCCARTER ENGLISH, LLP TH STREET, NW 12TH FLOOR WASHINGTON, DC Fax: jadragna@mccarter.com KIMBERLY BRICKELL FRANK ESQ. MCCARTER ENGLISH, LLP TH STREET, NW 12TH FLOOR WASHINGTON, DC Fax: kfrank@mccarter.com WILLIAM DOWLING, VP ENGINEERING & ENERGY SUPPLY MlDWEST ENERGY, INC CANTERBURY ROAD PO BOX898 HAYS, KS Fax: bdowling@mwenergy.com EARNEST A. LEHMAN, PRESIDENT & GENERAL MANAGER MIDWEST ENERGY, INC Canterbury Rd PO Box898 Hays, KS elehman@mwenergy.com

10 ANNE E. CALLENBACH, ATIORNEY POLSINELLI PC 900 W 48TH PLACE STE 900 KANSAS CITY, MO Fax: acallenbach@polsinelli.com 16-KC P E-593-ACQ FRANK A. CARO, JR., ATIORNEY POLSINELLI PC 900 W 48TH PLACE STE 900 KANSAS CITY, MO Fax: fcaro@polsinelli.com SUNIL BECTOR, ATIORNEY SIERRA CLUB 2101 WEBSTER, SUITE 1300 OAKLAND, CA Fax: sunil.bector@sierraclub.org HOLLY BENDER SIERRA CLUB 133 S BUTLER ST, STE.106 MADISON, WI Fax: holly.bender@sierraclub.org JAMES P. ZAKOURA, ATIORNEY SMITHYMAN & ZAKOURA, CHTD W 110TH ST STE 750 OVERLAND PARK, KS Fax: jim@smizak-law.com RENEE BRAUN, CORPORATE PARALEGAL, SUPERVISOR SUNFLOWER ELECTRIC POWER CORPORATION 301W. 13TH PO BOX 1020 ( HAYS, KS Fax: rbraun@sunflower.net JAMES BRUNGARDT, REGULATORY AFFAIRS ADMINISTRATOR SUNFLOWER ELECTRIC POWER CORPORATION 301W. 13TH PO BOX 1020 ( HAYS, KS Fax: jbrungardt@sunflower.net AL TAMIMI, VICE PRESIDENT, TRANSMISSION PLANNING AND POLICY SUNFLOWER ELECTRIC POWER CORPORATION 301W.13TH PO BOX 1020 ( HAYS, KS Fax: atamimi@sunflower.net TAYLOR P. CALCARA, ATIORNEY WATKINS CALCARA CHTD MAIN ST STE 300 PO DRAWER 1110 GREAT BEND, KS Fax: tcalcara@wcrf.com DAVIS ROONEY, VICE PRESIDENT AND CFO SUNFLOWER ELECTRIC POWER CORPORATION 301W. 13TH PO BOX 1020 ( HAYS, KS Fax: hrooney@sunflower.net MARK D. CALCARA, ATIORNEY WATKINS CALCARA CHTD MAIN ST STE 300 PO DRAWER 1110 GREAT BEND, KS Fax: mcalcara@wcrf.com DAVID L. WOODSMALL WOODSMALL LAW OFFICE 308 E HIGH ST STE 204 JEFFERSON CITY, MO Fax: david.woodsmall@woodsmalllaw.com

11 /SI DeeAnn Shupe DeeAnn Shupe ED MAY